2002 Berhad • Annual Report Eon Capital
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1 contents Notice of Annual General Meeting 2 Statement Accompanying Notice of Annual General Meeting 3 2002 BERHAD • ANNUAL REPORT EON CAPITAL Five-Year Financial Highlights 4 Corporate Information 6 Profile of The Directors 7 Group Structure 10 Group Operational Structure 11 Board and Management Committees 12 Group Management 13 Chairman’s Statement 14 Review of Operations 17 Statement on Corporate Governance 26 Additional Compliance Information 31 Statement of Directors’ Responsibility for Preparing the Financial Statements 32 Audit Committee Report 33 Statement of Internal Control 36 Risk Management Framework 38 Calendar of Significant Events and Activities 39 Analysis of Shareholdings 40 List of Properties Held by The Group 44 Group Corporate Directory 48 Reports and Financial Statements 59 Proxy Form 2 notice of annual general meeting NOTICE IS HEREBY GIVEN THAT the Fifth Annual General Meeting of EON CAPITAL BERHAD will be held at Nirwana Ballroom 1, Lower Lobby, Mutiara Hotel, Jalan Sultan Ismail, 50718 Kuala Lumpur on Monday, 26 May 2003 at 12.00 noon for the following purposes: EON CAPITAL BERHAD • ANNUAL REPORT 2002 BERHAD • ANNUAL REPORT EON CAPITAL ORDINARY BUSINESS 1. To receive and adopt the Reports of the Directors and Auditors and the Audited Financial Statements for the year ended 31 December 2002. RESOLUTION 1 2. To re-elect the following Directors pursuant to Article 102 of the Company’s Articles of Association: a. Y. Bhg. Tan Sri Dato’ Seri Mohd Saleh bin Sulong RESOLUTION 2 b. Y. Bhg. Datin Dr. Umikalsum binti Mohd Noh RESOLUTION 3 c. Mr. Rin Kei Mei RESOLUTION 4 d. Y. Bhg. Dato’ Maznah binti Abdul Jalil RESOLUTION 5 e. Dr. Tiong Ik King RESOLUTION 6 f. Mr. Wizayaratnam Somasundram RESOLUTION 7 3. To re-appoint Messrs. PricewaterhouseCoopers as Auditors and to authorise the Directors to fix their remuneration. RESOLUTION 8 4. To transact any other ordinary business of the Company for which due notice has been given. By Order of the Board. LEE CHEAU PENG (MAICSA 7005134) Company Secretary Kuala Lumpur 3 May 2003 Note i A member entitled to attend the meeting may appoint a proxy who may but need not be a member of the Company. The provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Note ii The instrument appointing a proxy must be deposited at the Registered Office of the Company at 12th Floor, Wisma Cyclecarri, 288, Jalan Raja Laut, 50350 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting. Note iii If the member is a corporation, the proxy form should be executed under its Common Seal or under the hand of an officer or attorney duly authorised. statement accompanying 3 notice of annual general meeting Pursuant to paragraph 8.28 of the Listing Requirements of the Kuala Lumpur Stock Exchange. 1. Name of Directors who are standing for re-election Under Article 102 of the Company’s Articles of Association i. Y.Bhg. Tan Sri Dato’ Seri Mohd Saleh bin Sulong ii. Y.Bhg. Datin Dr. Umikalsum binti Mohd Noh iii. Mr. Rin Kei Mei EON CAPITAL BERHAD • ANNUAL REPORT 2002 BERHAD • ANNUAL REPORT EON CAPITAL iv. Y.Bhg. Dato’ Maznah binti Abdul Jalil v. Dr. Tiong Ik King vi. Mr. Wizayaratnam Somasundram 2. Details of Attendance of Directors at Board Meetings Three board meetings were held following the completion of the corporate exercise which led to the listing of the Company on 23 December 2002. Attendance of the Directors is shown below :- No. Directors Attendance 1. Y. Bhg. Tan Sri Dato’ Seri Mohd Saleh bin Sulong 3 out of 3 meetings 2. Y. Bhg. Datin Dr. Umikalsum binti Mohd Noh 3 out of 3 meetings 3. Mr. Rin Kei Mei 2 out of 3 meetings 4. Y. Bhg. Dato’ Maznah binti Abdul Jalil 3 out of 3 meetings 5. Dr. Tiong Ik King 3 out of 3 meetings 6. Mr. Wizayaratnam Somasundram 3 out of 3 meetings 3. Date, time and place of Board Meetings No. Type of Meeting Date Time Place 1. 1st Board of Directors Wednesday, 12.35 p.m. Board Room Meeting for 2003 22 January 2003 EON Capital Berhad 12th Floor, Wisma Cyclecarri 288, Jalan Raja Laut 50350 Kuala Lumpur 2. EON Capital Special Board Monday, 12.50 p.m. The Mauna Lani A of Directors Meeting 24 February 2003 Pan Pacific Glenmarie 1, Jalan Usahawan U 1/8 Seksyen U1 40250 Shah Alam Selangor 3. 2nd Board of Directors Wednesday, 3.30 p.m. Board Room Meeting for 2003 23 April 2003 EON Capital Berhad 12th Floor, Wisma Cyclecarri 288, Jalan Raja Laut 50350 Kuala Lumpur 4. The details of Directors who are standing for re-election are presented on page 7 to 9 of the Annual Report. 4 five-year financial highlights FINANCIAL PERFORMANCE The consolidated results of EON Capital Berhad incorporates the one month consolidated results of EON Bank Berhad and its subsidiary companies. EON Bank Berhad became a wholly-owned subsidiary company of EON Capital Berhad on 2 December 2002, pursuant to the EBB Scheme of Arrangement and Amalgamation between EBB and its shareholders under Section 176 of the Companies Act, 1965. EON Capital Berhad was previously a dormant company and commenced its operations as an investment holding EON CAPITAL BERHAD • ANNUAL REPORT 2002 BERHAD • ANNUAL REPORT EON CAPITAL company upon the acquisition of EON Bank Berhad and its subsidiary companies on 2 December 2002. The five- year financial highlights of EON Bank Group is provided below to reflect the underlying business of the Group. For illustrative purposes, we have appended below the proforma results for 2002 to show the effects on the consolidated results of EON Capital Berhad had the EBB Scheme of Arrangement and Amalgamation been completed on 1 January 2002. EON Capital Berhad EON Bank Group Proforma Amount in RM Millions 1998 1999 2000 2001 2002 2002 INCOME Operating Income Before Loan Loss and Provision 168 337 412 549 562 565 Profit (Loss) Before Taxation ( 22 ) 209 319 328 390 393 Profit (Loss) After Taxation ( 35 ) 200 261 201 251 254 Actual BALANCE SHEET Total Assets 12,890 13,597 17,792 24,721 30,876 30,573 Net Loans and Advances 8,589 9,349 11,659 17,388 20,574 20,574 Total Deposits 10,885 11,793 14,854 20,025 25,823 25,786 Shareholders’ Funds 1,241 1,442 1,775 2,075 2,405 1,850 Net Tangible Assets Backing (RM) 1.1 1.3 1.4 1.4 1.6 2.67 Proforma FINANCIAL RATIOS Earnings per share (sen) - basic ( 3.1 ) 17.9 23.2 16.7 19.6 36.7 Return on Shareholders’ Funds (%) ( 2.8 ) 13.9 14.7 9.7 10.5 13.7 Risk Weighted Capital Ratio (%) (EON Bank Berhad) 15.3 15.8 11.7 12.5 11.8 N/A Net Non Performing Loan Ratio (%) 4.2 5.1 5.2 5.7 4.9 N/A 5 PROFIT BEFORE TAXATION NET LOANS AND ADVANCES ( RM Million ) ( RM Million ) 390 EON CAPITAL BERHAD • ANNUAL REPORT 2002 BERHAD • ANNUAL REPORT EON CAPITAL 328 319 20,574 17,388 209 11,659 9,349 8,589 (22) 98 99 00 01 02 98 99 00 01 02 TOTAL ASSETS SHAREHOLDERS' FUNDS ( RM Million ) ( RM Million ) 2,405 30,876 2,075 24,721 1,775 1,442 17,792 1,241 13,597 12,890 98 99 00 01 02 98 99 00 01 02 6 corporate information BOARD OF DIRECTORS Chairman • Y. Bhg. Tan Sri Dato’ Seri Mohd Saleh bin Sulong Deputy Chairman • Y. Bhg. Datin Dr. Umikalsum binti Mohd Noh Members • Mr. Rin Kei Mei EON CAPITAL BERHAD • ANNUAL REPORT 2002 BERHAD • ANNUAL REPORT EON CAPITAL • Y. Bhg. Dato’ Maznah binti Abdul Jalil • Dr. Tiong Ik King • Mr. Wizayaratnam Somasundram COMPANY SECRETARY • Lee Cheau Peng (MAICSA 7005134) REGISTERED OFFICE 12th Floor, Wisma Cyclecarri, 288 Jalan Raja Laut, 50350 Kuala Lumpur Telephone : 03-2694 1188 Facsimile : 03-2692 1851 Website : www.eonbank.com.my SHARE REGISTRAR Panama Resources Sdn. Bhd. No. 23, Jalan Sri Hartamas 7, Sri Hartamas, 50480 Kuala Lumpur Telephone : 03-6201 1120 Facsimile : 03-6201 3121 AUDITORS PricewaterhouseCoopers 11th Floor, Wisma Sime Darby, Jalan Raja Laut, P.O. Box 10192, 50706 Kuala Lumpur PRINCIPAL BANKER • EON Bank Berhad SOLICITOR • Nik Saghir & Ismail STOCK EXCHANGE LISTING • The Main Board, Kuala Lumpur Stock Exchange (23 December 2002) profile of the directors 7 Y. Bhg. Tan Sri Dato’ Seri Mohd Saleh bin Sulong Y. Bhg. Tan Sri Dato’ Seri Mohd Saleh bin Sulong, Malaysian, aged 51, was appointed as Chairman, Non-Independent Non-Executive Director of EON Capital Berhad on 23 December 2002. He is the Chairman of the Nominating Committee and Group Remuneration Committee and a member of the Audit Committee. Tan Sri is the Group Chairman of DRB-HICOM Berhad. His other directorship of public companies include Eastern Pacific Industrial Corporation Berhad, Edaran Otomobil Nasional Berhad, EON Bank Berhad, EON Finance Berhad, 2002 BERHAD • ANNUAL REPORT EON CAPITAL Gadek (Malaysia) Berhad, HICOM Holdings Berhad, and Horsedale Development Berhad. Tan Sri is a member of the Chartered Institute of Management Accountant, U.K., and worked as an accountant in Cycle & Carriage Bintang Berhad, Cycle & Carriage (M) Sdn Bhd and United Cycle Sdn Bhd for 10 years before his appointment as Executive Director of the Master-Carriage Group of Companies in 1984. Tan Sri has no direct holding of securities in the Company. He has indirect holdings of 347,270,469 (50.10%) in the Company by virtue of his deemed interest of 31.53% in Edaran Otomobil Nasional Berhad.